Irving Browne Isaac Grant Thompson.

The American reports: containing all decisions of general ..., Volume 36 online

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that it Avas to save him from all further difficulty ? And he said it
was recorded on the minutes of the bank, and that was the same as
a wnttoti promise to that effect, and I stated that on those condi-
tions^ X signed the deed. I was under great nervous excitement at
the tiroe, and can't distinctly recollect all that was said. I do re-
roembei'^ however, that my brother said that they would imprison
'^^yhriQi-^jjQ^j jf I did not sign the deed. Mr. Compton said that
^^^1« had agreed, and it was on the minutes, to release him
rom ci-iTninal prosecution, if I would sign the deed."

Utti^j* evidence clearly shows that neither the directors of the
J**^» XX or any one else representing the bank, were present when

e (lo^<5| ^-as signed, or had any conversation with appellant in re-

^ t;o signing it. The deed was produced by appellant's husband,

s>gne^ «^nd acknowledged by himself and her, and by him delivered

u^ l>ank. And it is also shown that no one representing the

^ Ix^d any knowledge of the representations that were made to
'•^PP^lla^nt, to induce her to execute the deed. The suggestion of
**P^^^^ tit's counsel that appellant's husband, in this transaction,

WHS t^_ -

*^I>re8enting the bank, is contrary to the unquestioned facts.

e -Wa^ representing himself, and trying to screen himself from a

]a8 X^x-osecution at the hands of the bank, for the crime of embez-

^ |°fi its funds, and it was to aid him in this that appellant execu-

^H© deed. Appellant's brother, as he admits, acted, as he

J^SVit at the time, in the interest of appellant and her husband.

, ^^^^ly> he had no authority to act on behalf of the bank, and

.^^^ not assume to have such authority.



^.



authority.
^^ then, if appellant was induced by false representations of her



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150 ILLINOIS,



ComptoD V. Bunker Hill Bank.



husband and brother to execute the deed, since those representa-
tions were neither induced by, nor made of the knowledge of, those
representing the bank, the bank cannot be affected by them.
Spurgm v. Traub, 65 111. 170 ; Marston v. Brittenham, 7G id. nil.

The guilt of appellant's husband is clear and is not controverted;
and therefore any threat which may be implied, from the resolution
of tlie board of directors, to prosecute him for the offense of which
he was thus guilty, does not constitute duress. Bddy v. Herri n^
17 Me. 338; Whitfield v. Longfellow, 13 id. 14C.

The gist of appellant's case is that her deed was executed in con-
sideration of an agreement to compound a criminal offense, which
is in contravention of law, and she has not realized therefrom the
result that she anticipated.

We said in ^7. Z., J. i^ C. R. R. Co. v. MatlierSy 71 111. 598; s.
c, 22 Am. Rep. 122: " A court of equity will not lend its aid to
enforce the performance of a contract which appears to have been
entered into by both tlio contracting parties for the express pur-
pose of doing that which is illegal; and where such a contract has
been executed by one of the parties by conveying real estate, a court
of equity will not in general interfere, but will leave the title to
the property where the parties have placed it." This is but the
rei)etition of an old and well-established principle of equity juris-
prudence, and it was previously applied by this court in Jerome v«
Bigelow, (jQ 111. 452; s. c, 16 Am. Rep. 597, and Linessy, Hesing,
44 111.113.

The same principle controlled in Reed v. McKee, 42 Iowa, 689,
cited by appellant's counsel, but that case differed from the present
in this: It was a bill to foreclose a mortgage given to secure certain
promissory notes, which had been given to compound a crime of
embezzlement. The contract was still executory, and the court
would not lend its aid to enforce its performance. In the present
case, on the contrary, the contract has been fully executed and the
property conveyed, and the court is asked to lend its aid to open it
up, cancel it, and set aside the conveyance. Allison v. HesSf 28 Iowa,
389, is more analogous. There, the conveyance had been made
to compound the felony of the son of the petitioner, and the court
held that the conveyance could not be set aside, observing: "And
the rule seems to be well settled, that where a contract is illegal,
whether it is because of being malum prohibitum or malum m se,
the law will not afford affirmative relief to either, but will leave the



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OCTOBER TEEM, 1880. 151

Roy T. QoiDgs.

^rties 23kfi it found them." Like raliog obtained in InhabUanls of
Worcester v. Eaion^ 11 Mass. 377. Smith v. Rowley y QQ Barb. 603,
is almost literally the same as this case. There, a married woman
filed her bill to set aside her couveyanco, upon the alleged ground
that it Avas obtained from her by duress and undue influence. Her
husband was charged by the defendant with embezzlement from
him to Si large amount, and she claimed that she executed the deed
in qaes fcion, under an understanding and implied agreement that
in case sLe executed the deed in question, the defendant would re-
frain f r-om prosecuting her husband for the embezzlement.

The Fiusband's guilt was clear, and the deed Was executed upon
his rec^^^iest. The court said: "If her story is correct, the deed
wouJd Seem to be void, on the ground that it was executed in con-
fl'der^tion of compounding a criminal offense, and was contrary to
^"^,^^-«».t.ute. But though the deed may be void for such reason,
equity does not relieve the party who executed it upon or for such
immo jc-;^! ^^^ illegal consideration and purpose."
^^**<3^ivinfi: no error in the ruling below, the decree will have to

l^ *^^ i tting a point of practice.]

Judgment affirmed.
^^^^*^ EY, C. J., and Scott, J., dissent.



Boy v. Goikgs.

(96 HI. 961.)

MoTtgoffe — thoM — rigJU of mortgagee to take possession.

^** ^ provision in a chattel mortg-age, that if the mortgagee shall at any

^^^ ^fore maturity of the debt " feel himself unsafe or insecure," he may

^^^ l^ossession of the mortgaged property, he cannot take such possession

~^^®«tUere is reasonable ground or prol)able cause for such action, although

^^^ need not be actual danger.*

T^'ROTER. The opinion states the case. The plaintiff had jndg-
> ^ent below.

^muel P, Wheeler, for appellant, cited Fox v. Kittofiy 19 111. 519;

• Omtro, cane v.i>ib6ey (46 Wis. 128t), as Am. Rep. 700.



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152



ILLINOIS,



m

i



II



'l^



Roy T. Qoings.



Bailey v. Oodfrey, 54 id.
D'Arcy, 71 111. 648.



507 ; 8. c, 5 Am. Bep. 157 ; Lewis y.



Mulkey <& Leed, for appellee.

Dickey, C.J. In January, 1878, Goings gave appellant, as part
payment for a farm, a note, secured by a chattel mortgage, for the
sum of $278.47, due March 1, 1879. The mortgage contained a
clause which provided that if Boy should, at any time before the
said promissory note became due, ^^feel himself unsafe or inse-
cure," he should have the right to take possession of the property
mortgaged. A description of part of the property mort^ged (as
found in the mortgage), was as follows: "All crops to be grown iu
year 1878, on mortgagee's part of old Barber farm.*'

In October, 1878, Boy seized, by virtue of this mortgage, part of
the crops grown on that farm in the year 1878, consisting of corn,
tobacco, and top fodder.

Goings (insisting that this taking was unlawful) brought an ac-
tion of trover, and in the Circuit Court recovered $225 damages.
Boy appealed to the Appellate Court for the Fourth District, where
the judgment was affirmed, and from that judgment he brings the
record to this court for review, upon the certificate of the Appellate
Court that questions of law arise in the cause, of sufficient import-
ance to require a decision by the Supreme Court. That court cer-
tifies that the following questions arise in the case:

First. Was the mortgage void or valid as to the crops subse-
quently planted and grown?

Second. If valid, could the mortgagee judge of the crisis for him-
self, or must he have reasonable grounds for his action before
taking possession under the terms of the instrument?

Third. If void, could the mortgagee take possession of the sub-
sequent existing property without some new act of the mortgagor
or his assent, or without a state of facts which would justify the
taking of possession under the terms of the instrument ?

That court also certifies that they found from the evidence there
were no reasonable grounds for taking possession under the terms
of the instrument, and if the instrument was valid the taking of
possession was without just warrant, unless the mortgagee had the
absolute right to judge of the crisis for himself.

Bailey v. Godfrey, 54 111. 507; s. c, 5 Am. Bep. 157, was an
action of trover, brought by Bailey to recover damages for the tak-



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OCTOBER TERM, 1880. 153

Boy V, QoingB.

^^S o! property of Bailey, by virtue of a mortgage which contained
^ condition in the very words of the condition of the mortgage in
th\B case; that is, that if at any time before the notes become due
the mortgi^ee shall feel himself unsafe or insecure he may, in that
^vent, take immediate possession of the property described in the
mortgage. In that case this court said : ^' By the express terms of
the mortgage the mortgagee * * * was made the sole judge of
the happening of the contingency.*'

The case of Lewis v. UArcy^ 71 HI. 648, was an action of
replevin brought by D'Arcy against Lewis, a constable, who had
seized upon attachment personal property, as the property of SuUi-
»^an, upon which property D'Arcy held Sullivan's chattel mortgage,
duly recorded, etc., containing precisely the same condition — that
the mortgagee might take immediate possession of the property at
any time before the indebtedness secured by the mortgage fell due,
^n case he should feel unsafe or insecure. This court held in favor
of D'Arcy, saying: ''As was said in Bailey v. Godfrey ^ 54 111. 507,
^y the express terms of the mortgage the mortgagee was invested
With the power to elect, and was made the sole judge of the hap-
pening- of the contingency when ho would elect to take possession
oUhe property."

^^ both of these cases this court held, upon the facts in each
J^, that the mortgagee ** had ample reason to feel unsafe and
insecure in regard to his debt."

^ne c«ise of Furlong v. CoXy 77 UK 293, was an action of replevin

J'^ngh t "by Furlong against Cox for the furniture of a hotel, which

uriotig ]j|^ mortgaged to Cox, and which Cox had seized by virtue

<> the mortgage before the mortgage debt was due, which mort-

^ ^on tained a condition that Furlong should retain the posses-

8Jon U^|.jj ^^ money fell due, with a further provision that Cox

^igiit, «c^^ j^jjy ^jjjj^ YiQ should think the property, or any part

fTk^** was in danger of being sold, removed, etc., take possession

^ ^ B^me." This case was decided in favor of Furlong, and was

^ j'^gttished from the cases of Bailey v. Godfrey and Lewis v.

tr^^> supra, saying as to those cases: "It will bo observed that

^ ^^*^ of those cases there was evidence showing danger of loss,

* but in this case there is no evidence that there was the

* ^^A T^** danger of loss, or even that appellee thought there was."

Ana it ^ag there said Cox should "at least have proved that he

tnouglj^ there was the danger specified. ♦ ♦ ♦ And before he



V



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154 ILLINOIS,



Roy V. Goings



can justify the act (of taking) lie should at least have shown that
such was his belief."

It is again said (speaking of the evident intention of the parties
and the circumstances under which the mortgage was given) that
Furlong supposed that Cox, before he could lawfully seize the prop-
erty, " must, in good faith, based upon reasonable grounds, believe
there was danger of sale or removal of the property,'' and that it was
not the intention to "place it in the uncontrolled power (of Cox) at
any time, from pique, caprice, or mere whim, to strip the hotel of its
furniture," etc. And it is further said, appellant "was willing to
give the power to take possession if she did any act, or if any other
cause should arise from which there should be reasonable ground to
suppose that there was danger, * * * and must have supposed
he (Cox) would be governed by circumstances in thinking there
was danger, as would any other reasonable and fair business man***
Again it is said, ** the right to take possession depended upon his
thinking there was danger. Had the condition been that he might
reduce the property to possession when he might choose, then it
would liave been diflFerent. We are clearly of opinion this case is
widely different from the cases cited supra, as in those cases there
Wits * * * danger, and whilst here not the semblance of the
slightest danger is shown to have existed, not even that appellant
believed on the slightest grounds, or believed at all that the danger
existed."

In the case of Davenport v. Ledger, 80 111. 574, the ruling of the
court in Furlong v. Cox, supra, is alluded to and approved. In
the Davenport case the mortgage contained the same provision as
to the taking possession by the mortgagee, and the court charged
the jury that "the chattel mortgage giving to the defendant the
right to take possession of the goods if he felt (whether with suffi"
cient cause or not makes no difference) that his debt was not safe
and secure, he was, by the mortgage, made the sole judge upon that
subject, and if he did so feel, the plaintiff had no right to recover, **
etc. While the decision of the Davenport case did not turn upon
this instruction of the court, the court incidentally commented
ii])on it, saying in substance, that it was more favorable to the mort-
gagee than he was entitled to have it, in that it omits the essential
element, that his belief that he was unsafe or was insecure, had rea-
sonable grounds to support it.

All these cases, carefully examined and properly understood, are



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OCTOBER TERM, 1880. 155

Roy V. Goings.

in striofc accord with each other in so far as they relate to the con-
stniction to be placed upon this condition as to the right of taking
possession by the mortgagee. The first two cases referred to lay
down the law, that by the stipulation of the parties the mortgagee
is made the sole judge as to whether the contingency has or has not
happened upon which he is authorized to take possession. The
latter two cases, recognizing the same proposition, that he is made
the sole judge of the happening of the contingency, lay down the
rule, that in judging of that contingency he must act in good faith>
and must have reasonable grounds to support his belief. He must
have probable cause for his belief. As was said in Furlong v. CoXy
he must in good faith, based upon reasonable grounds, believe there
▼as danger; and again, that he must have *' reasonable grounds to
suppose that there was danger.''

The finding certified to us from the Appellate Court, as to the
facts of the case at bar, gives us the basis on which that court ruled
*s to the law. That court certified that it appears from tho evi-
<lenco "there were no reasonable grounds for taking possession
^'ider the terms of the instrument, and if the instrument be valid
^^ taking possession was without just warrant, unless the mort-
^%^ had the absolute right to judgo of the crisis for himself.''

As shown above, the mortgagee, under such a mortgage had the
right to judge of the crisis for himself, subject only to the limita-
tion that his judgment must be exercised in good faith and upon
r^a^onable grounds. This means reasonable ground, or probable
cause, to think, or believe, or feel that there was danger which ren-
dered tho taking of the property by him proper under the agreement,
iJisdoos not require that there should be actual danger, or that
^proofs should furnish the court, at the time of the trial, with
J^onablo grounds to decide that there was actual danger. It was
samcient, if, at the trial, it appeared that at tho time of the taking
here was apparent danger, such that a reasonable man might, in
good faith, act upon it; in other words, there should bo reasonable
groaada to believe that there was danger, or that he did not act
without probable cause. Tho Appellate Court has found there
were no reasonable grounds for taking possession under the terms
01 the instrument. If this finding of the Appellate Court is to be
underBtood to mean simply that there was, in fact, no such danger,
such finding is not decisive of this case. It is not suflScient to
snow that the taking was illegal. If, however, the finding is to b«



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156 ILLINOIS,



Roy y. Goings.



understood as meaning that the mortgagee had no reasonable
grounds to believe that his debt was unsafe and had no probable
cause for the taking, it is decisive as against the legality of the
taking.

Taking the whole record together, we think the true meaning of
the finding of the Appellate Court, as stated in the same, is that
there were, in fact, no reasonable grounds for the mortgagee to
feel himself unsafe or insecure, and therefore hold their rulings
correct.

The law on this subject, as laid down in the cases heretofore
decided in this court, is plainly this, that by such contract the
mortgagee is made the sole judge of the crisis in question, but that
judgment must be exercised in good faith and upon probable caase.
He is not at liberty to judge capriciously, or upon a mere whim, or
maliciously. As indicated in Furlong v. Cox^ supra, in such case
the mere fact that the mortgagee declares that he feels himself un-
safe and insecure is not conclusive. When that question is put in
issue, and it appears from the proofs that tlie mortgagee had no
probable cause or reasonable grounds to feel himself unsafe and in-
secure, the taking must be held unlawful ; but it is not essential
in such case that there should be real cause of danger. It is not
necessary that the debt should, in fact, be unsafe or insecure. It
is sufficient for this purpose that the circumstances arc such that a
reasonable man, thus situated, might, in good faith, believe himself
unsafe and insecure.

It is insisted by the appellant in the case at bar that the mort-
gage, as a mortgage, was inoperative in giving the appellant title
to the corn, tobacco and fodder grown upon the Barber place during
the year 1878, and that therefore the mortgage itself was no security
for the debt; but appellant also insists that the mortgage was valid
between the parties as an executory contract, and authorized appel-
lant to take possession, if for any cause he felt unsafe or insecure,
and hence the mere invalidity of the mortgage as a lien against
third persons was a sufficient ground to warrant such feeling of
insecurity ; and the question is very elaborately discussed as to
whether a chattel mortgage can operate upon property not in being
(potentially or otherwise), at the time of the execution of the
mortgage.

We do not perceive that this question, so fully discussed, has an;
necessary bearing upon the decision of this case. From a fair con-



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NOVEMBER TERM, 1880. 157

Otis V, Qro68.

Btraction of the language of this instrument^ the feeling of
insecurity which was, by the terms of the instrument, to give
the mortgagee the right to take immediate possession, evidently
had reference to such a feeling to be produced by some future cause*
— by some cause not in being at the time when the mortgage was
executed. We may assume, therefore, that counsel for appellant,
if right m his views as to the effect of a chattel mortgage upon
property not in being at the time of its execution, and that be is
right in the position that the instrument is, nevertheless, an
executory contract, and valid, as such, between the parties, still, it
is obvious that a feeling of insecurity, to arise from a consideration
of that question of law, was not such a*feeling of insecurity as was
meant and contemplated by the parties making the contract. This
case must turn upon the question whether Roy, at the time he
seized this property, did, in good faith, feel that he was unsafe or
insecure from some cause which occurred after the making of the
mortgage, and that he not only did in fact so feel, but that this
^as not without probable cause or reasonable grounds to feel thus.
It is not necessary that it should appear at the trial that there were
y^asonable grounds to believe that this debt was unsafe or insecure,
]^ point of fact, at that time. If there was, in fact, apparent
insecurity at the time of the taking, arising from facts and circnm-
^witices brought to his knowledge, it was sufScient to justify the

^\tig, if he, in fact, from such cause, did feel unsafe and insecure,

sod acted from that motive. The Appellate Court have held the

Acts in this regard for appellee,
^e Judgment of the Appellate Court will, therefore, be affirmed.

Judgnient affirmed.

°^^^^^n and Sheldok, JJ., dissent



Otis v. Gross.

(96IU.612.)

Bank-— iMohent— 'preferred elaims — court Jiindi.

^V^^^ deposit of court funds and of f ands of court officers in a bank, by
^ ^ coarty has no preference over claims of other creditors, on the insoU
^^nT of the bank, although the assets are in the hands of a receiver.



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158 ILUNOIS,



OUb y. OroBs.



THE opinion states the case. The plaintiff had judgment be*
low.

11 1 /. L, High, for appellant.

Gardner <& Cliandler, for appellees.

' ii ^«

* " Walker, J. It appears that the Circuit Court of Cook county,

by an order entered on its records, designated the State Savings
Institution of Chicago as the depositary of moneys in the hands of
the officers of the court and under its control. By resolution the
bank accepted the trust Subsequently, the institution failed, and
its officers fled to avoid criminal prosecution; and the institution
I ! being insolvent to the amount of $1,800,000 above its assets, a re-

ceiver was appointed to take charge of the affairs and assets of the
bank.
The clerk of the Circuit Court, Gross, opened an account with
\\l the bank, and made deposits of the funds under the control of the

i.l court, as occasion required, and funds were drawn out when needed

' to pay litigant-s and as directed by the court When the bank

:f failed there was deposited and not checked out of the bank the sum

of $2,597.43, deposited by the clerk of the court

A dividend of ten per cent on the debts against the bank had
been declared, which would probably nearly exhaust the assets,
i which the clerk refused to receive, but demanded the full amount,

insisting the deposit was a special fund, and that it was a special
ij i| deposit It is admitted that the corporation was authorized to do,

i i| and did a commercial and savings deposit business; that when this

fund was deposited in the bank it was made, entered, numbered



jj and kept on the books of the institution in like manner as all other

savings deposits, except as to payment of interest; that a deposit
book was given to and accepted by the clerk, in which these
deposits were entered; thai it was the same in character and form

j| as the deposit books given to other depositors, and the funds depos-

ited by the clerk were entered in his book in like manner as in all
other cases, and the money thus received was mingled with the
general funds received and held by the institution, and was in no
manner ever kept separate or apart from the general funds or dis-
tinguished therefrom. The order of the court did not require, nor
did the resolution of the directors agree that it should be kept sep-
arate.



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NOVEMBER TERM, 1880. 159

Otis V. Qross.

The clerk filed a petition against the receiver to have this de-
clared a trust fund, and to have the full amount of the deposit
I)aid to him. And on the facts here stated the Circuit Court made
an order that the receiver should so pay it He thereupon per-
fected an appeal to the appellate court for the first district, where,
on a hearing, the order of the Circuit Court was affirmed, and he
brings the record to this court and urges a reversal.

From the facts in this case it is manifest that this was not a
special deposit or a mere bailment. The money when deposited
'was commingled with the general funds of the bank, as was that of
other depositors. It was not agreed to or directed to be kept sepa-



Online LibraryIrving Browne Isaac Grant ThompsonThe American reports: containing all decisions of general ..., Volume 36 → online text (page 20 of 123)